Processing business transactions between two or more parties has been a manually intensive effort and has experienced little change. Simple transactions often involve multiple parties to the transaction, multiple types of documents (electronic and/or physical documents) and multiple identification approaches for information pertaining to the documents. In general, information regarding these transactions, whether in documents or otherwise, is often difficult to obtain and not readily available to certain parties to the transaction.
One type of business transaction that has required significant tracking and processing effort involves the shipment of goods between parties to the transaction. Generally, the shipment transaction process involves a goods transport path and a payment process path. The goods transport path typically starts when a carrier's driver picks up the goods at the shipper's warehouse dock. The driver typically receives a copy of a transaction document, sometimes referred to as a bill of lading (BOL), from the shipper. This type of transaction document includes information associated with the shipment transaction, such as the time that the shipment is initiated, that is used by the shipper and carrier to track the shipment of goods. The driver transports the goods to a receiver where the receiver acknowledges receipt of the goods by, for example, signing a copy of a BOL. After the driver has delivered the goods to the receiver, the driver also submits the receiver's acknowledgment (e.g., a signed copy of the BOL or electronic representation of the acknowledgment) to a central location for the carrier. This acknowledgment often includes data related to the shipment such as delivery time. However, the submission of the receiver's acknowledgment can be delayed, for example, until such a time when the driver delivering the shipment can provide the acknowledgment (and other information) to the central location.
During various points in the shipment transaction process, it is often desirable to generate records that contain information about pick-up and delivery times, origin and destination, and type of load. These records are sometimes difficult to generate. In particular, tracking shipment timing and generating records therefor can be challenging. For instance, if a shipment is not ready or there are delays at the loading dock when a driver arrives to pick up the shipment, the time for executing the shipment is increased. Often, carriers may wish to impose charges for delays at the place of shipment. Because the carrier is typically not part of the original transaction documents (e.g., a BOL), the shipper may dispute charges, which can cause payment delays. Back at the loading dock, a second problem is created when manual changes are made on the BOL. Unfortunately, these changes rarely get recorded in the shipper's permanent electronic records, thus causing a difference between the shipper's and the carrier's paperwork for the same shipment. Without accurate tracking of timing and other shipping-related characteristics, parties to the transaction are often without sufficient information upon which to base transaction processing decisions or for which to use in monitoring performance.
When a BOL is used for the shipment and the original and delivery copies of the BOL reach the carrier's central location, information from the BOL is made available to the carrier. For instance, the carrier can identify shipment acceptance and timing information from the BOL and use the information to generate an invoice for the original shipment, which is sent to the party responsible for payment of the shipping and/or other parties to the transaction. The responsible party (e.g., the shipper) typically receives the invoice amid a multitude of invoices for many carriers and attempts to match the invoice with a copy of the original BOL. If a billing error is discovered, the responsible party might send a check for a partial payment or simply hold the entire payment until the corrected invoice is provided. The carrier receives this check and must then track down the original BOL and delivery copy to know why the check is for less than the total amount due. It is only after communicating with the shipper directly that the carrier finds out a mistake was made in the original paperwork. The carrier sends the shipper an amendment to the original invoice, and the shipper must then organize and file all the paperwork together.
The payment process path starts when the driver picks up the goods from the shipper. The driver sends a copy of the BOL (or equivalent) to the carrier's central location for processing and the carrier rates the BOL. Rating typically involves determining the shipment cost that takes into the account various shipment parameters such as the size, weight, type of material, and destination of the shipment, which is related to the time it will take the driver to make the delivery. The carrier creates an invoice, sets up an accounts receivable, and sends the invoice to the shipper's accounts payable department. The shipper, either internally or via a third party, audits the invoice to ensure the final cost is proper.
One of the more challenging aspects of the traditional transaction process involves reaching agreement as to the final cost. If there is a dispute as to final cost, the shipper and carrier begin a burdensome and sometimes lengthy negotiation process in an attempt to settle the dispute. If the dispute is resolved, the shipper sets up an accounts payable for the transaction. The shipper will then send payment to the carrier and clear the accounts payable. The traditional process for paying the carrier and clearing the accounts payable involves several manually intensive steps. Upon receipt of payment, the carrier clears the accounts receivable. The traditional process for clearing an accounts receivable includes the carrier manually inputting final payment information into the accounts receivable system.
Another challenge to the traditional transaction process involves the difficulty in tracking and obtaining information about the shipment transaction. This information is often related to the final cost. For instance, if a shipper causes a delay at the shipping dock and the carrier incurs expenses relating to the delay, it is sometimes difficult to account for this delay. In addition, certain parts of the tracking information is not readily available to all parties to a transaction. For instance, a carrier will typically have the information it needs from a BOL, but a shipper may not have access to the same information (e.g., the shipper may not know of the time of delivery).
As discussed above, the traditional approach to transaction management can lead to many challenges for a transaction between one shipper and one carrier. Typically, however, there are multiple carriers and shippers involved in multiple transactions, as well as other parties to a transaction between a shipper and carrier, which makes the situation more complex and correspondingly slow and inefficient. The transaction process is manually intensive in that it relies on transaction documents (such as a hard copy of a BOL) for proof of delivery and payment, resulting in a series of repetitive and time consuming steps. Also, in the instance of BOL documents, each BOL is often rated multiple times by multiple parties creating excessive redundancy.
Traditional shipment transaction systems are also highly susceptible to billing errors and fraud. For example, there is often no connection between the delivery of goods and the billing of the shipper for delivery. This may result in double billing, no billing at all, or over-billing for freight delivery charges. Also, an auditing error may occur which results in incorrect billing or payment. In addition, the carrier waits a disproportionately long time for payment while the invoice is being audited and/or disputed. For example, traditionally, a delivery takes about five days whereas payment takes about thirty days. This unnecessary delay adversely affects the carrier's working capital resources.
Additional costs arise as a result of the existing inefficiencies. Many of the costs are individually small, but very large in the aggregate. For example, the carrier incurs administrative costs including: the cost to create and deliver the initial invoice, costs of resolving billing disputes, costs of providing a signed copy of the BOL to the shipper, costs related to timing delays of the shipment and costs of posting accounts receivable. The shipper incurs similar administrative costs.
Another disadvantage of traditional shipment transaction systems is that they have a tendency to strain relationships. Because carriers and shippers do not always have an effective way to communicate about the shipment, business partnerships can be strained when there are disputes. For instance, it is sometimes difficult for a shipper to obtain information that can be used to evaluate the carrier's performance for a particular transaction or over a multitude of transactions, with the shipper and/or with other shippers. In addition, inaccuracies in either the shipment or invoice process create unnecessary tension along the entire supply chain for both shippers and carriers.
An additional disadvantage of traditional shipment transaction systems involves the inability to obtain immediate information regarding a shipment. Since the process is largely conducted manually, it is very difficult to track a shipment. To learn of the status of shipment or payment, there are various manual steps involved. For example, if the shipper wants to know if the carrier delivered the goods and if the payment has been made, the shipper must call the carrier and the appropriate financial institution. As another example, if the shipper wants to know how long it took the carrier to deliver the goods, it may need to contact the receiver or the carrier to obtain that information, which is often not readily available.
In some instances, carriers have offered Internet access to their shipment information. Shippers can access transaction information via the Internet to determine, for example, the status of a shipment. However, when a shipper is using multiple carriers, multiple accesses may need to be made in order to obtain information about different transactions. In addition, multiple shipments with a single carrier often require that the shipper access each shipment transaction separately. These approaches are unduly time consuming.
Still another challenge to the transaction process is related to the disparate reference and tracking numbers used by different parties to a transaction. For instance, a shipper's reference number is typically not compatible to a carrier's reference number for the same transaction. The carrier typically maintains the shipment data, so the shipper must use the carrier's reference number in order to access the data.
The above and other difficulties have been challenging to the management and tracking of business transactions, and particularly to shipping transactions.